Monthly ArchiveOctober 2008
Life Without Credit Dave on 12 Oct 2008
I am at the start of a long journey, a journey of financial discovery, forced upon me by my own lack of self discipline with my finances through my university days, which lead onto almost a decade of overspending through to my late twenties.
In short, you could say I’ve buggered up my life. I’ve certainly buggered up my credit rating, which has lead me to believe I will have to lead a life without credit – of any sort – for at least the next six years, perhaps longer.
Now at age 28, almost 29, that’s a little daunting - I’ll be 35 before my credit rating has recovered! However, I’m not deterred, in fact it’s made me determined to buy a house without a mortgage. So that is my life plan – find a way to buy a house without a mortgage, in other words, save up for a house.
Now given the average house price in England is currently around £169,000 that could take me a good few years. In fact, given the rate that I can save money, (£1,000 a month assuming I keep my costs down), it will take me over 100 months assuming compound interest of 5%, all other factors remain unchanged and I don’t stick my savings into an Icelandic bank!
Realistically, I think it would test the patience of a saint to achieve this target, so I am going to have to be a little creative.
Another factor that will hinder my progress is that once the credit crunch has resided and the property market picks up, I will have to contend with my target steadily increasing year on year, which will no doubt erode the effect of the interest I receive on the money stashed away.
So the journey begins, let’s just hope that I’ve mastered the art of delayed gratification otherwise it could be a long slog!